- Chris Williamson, chief economist at Markit
The recovery in the Eurozone is building up steam, as order books filled at the fastest pace and layoffs fell to a trickle, pointing to a very mild expansion in the third quarter. A report from Markit showed that services PMI rose to 52.2 in September, accelerating from 50.7 a month earlier, and slightly higher than analysts predicted. Activity in services firms, comprising the vast bulk of region's private sector, advanced at the highest pace since June 2011, outperforming a rate of expansion in manufacturing sector last month. As it was widely expected, Germany again led the expansion, while activity in French and Italian services sectors has finally returned to growth after staying in a contraction zone for more than a year.
In a separate report the European statistical office Eurostat showed sales at European retailers picked up significantly in August, suggesting improvement in consumers' mood. Retail sales in the 17-nation area inched higher, namely by 0.7% on a monthly basis, topping estimates of a 0.2% gain, while on an annual basis sales still remain negative, falling 0.3%. However, the level is much stronger than an upwardly revised 0.7% drop in the preceding month. Nevertheless, the struggling Eurozone is by no means out of the woods yet—the political instability in the region is a worrying signal, thereby any improvement can be easily derailed.
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